The decision in the Court of Appeal on Tuesday was based on a sample of wordings including hybrid wordings. Furthermore, local situations add to the complications that arise with this judgement so before anyone gets carried away about recovering all their losses over the last 6 months I’m afraid you will have to think again.

Furthermore, the judgement is open to appeal which is highly likely. The standard policy wordings on Disease/Virus interruptions reads something like this:

The policy will cover loss of income should the business have to close (by order or otherwise) should

a Specified Disease occurring at The Premises or within the distance in miles from the boundary of The Premises stated in The Schedule (5 miles is normal in these situations)

Specified Disease

(1) Any of the following diseases contracted by any person Acute encephalitis, Acute poliomyelitis, Anthrax, Chicken pox, Cholera, Diptheria, Dysentery, Erysipeloid, Legionellosis, Legionnaires Disease, Leprosy, Leptospirosis, Lyme Disease, Malaria, Measles, Meningitis, Meningococcal septicaemia, Mumps, Ophthalmia neonatorum, Paratyphoid fever, Puerperal fever, Plague, Rabies, Relapsing fevers, Rubella, Scarlet fever, Smallpox, Tetanus, Toxoplasmosis, Tuberculosis, Typhoid fever, Typhus, fever, Viral hepatitis, Whooping cough or Yellow fever.

(2) Viral haemorrhagic fever caused by the following Lassa virus, Junin virus, Machupo virus, Sabia virus, Guanarito virus, Ebola virus, Marburg virus, Crimean-Congo haemorrhagic fever virus, Hanta, virus, Rift Valley fever virus, Yellow fever virus or Dengue virus.

99% of SME policies have the basic Business Interruption cover such as that above. This case has always been about the bigger policies covering larger corporations and those who purchased more bespoke, and more expensive, insurance cover as they would have felt more exposed to greater risks. Pandemic and wider BI cover has always been available in the wider insurance market but it is VERY expensive. Rightly so, those policyholders who purchased the extra cover will have felt badly let down by their insurers as it is likely they probably had this type of event in the back of their minds when purchasing the extra/bespoke cover.

Having said all that, the subject will come up in conversation with insurers and we at McGowan Corporate Solutions will let you know if we hear different. Sheona and I will continue to monitor the situation but if you would like to discuss the matter further then please contact us on 01428 661950.

Craig McGowan

McGowan Corporate Solutions